KOV Commits to Phase 2 Exploration Program in Brunei Block M

CALGARY, ALBERTA--(Marketwire - Feb. 9, 2011) - Kulczyk Oil Ventures Inc. ("Kulczyk Oil" or "KOV") (WARSAW:KOV) is pleased to announce that Kulczyk Oil and its joint venture partners in Block M in Brunei Darussalam ("Block M JV") have elected to enter in to the Phase 2 exploration program under the terms of the Block M production sharing agreement ("Block M PSA"). 

The Phase 2 exploration program is for a term of one year commencing August 28, 2011. The minimum work obligations under the terms of the Block M PSA are:

1. acquire and process not less than 80 kilometres of onshore 2D seismic data and 500 kilometres of offshore 2D seismic data; and
2. drill at least three onshore exploration wells, each to a minimum depth of 1,150 metres. The Block M PSA allows for the replacement of two shallow wells with one well to at least 2300 metres.

The Phase 2 seismic obligation was converted into a 136 km² 3D programme which was completed in December of 2010. The remaining obligation in Phase 1 consists of drilling 1 well to a depth of 1,150 metres.

Under the terms of the Block M PSA, the Block M JV was granted the right to explore for and, in the event of hydrocarbon discovery and subject to the approval of PetroleumBRUNEI, produce oil and natural gas from Block M. To date, the Block M JV has: (i) acquired 254 km² of 3D seismic data and drilled and cased the Mawar-1 and Markisa-1 wells.

"The decision to move forward with Phase 2 reflects our continued optimism about the potential of Block M and the onshore area of Brunei" said Jock Graham, Executive Vice President of Kulczyk Oil.

The partners in Brunei Block M are KOV Borneo Limited (36%), Tap Energy (Borneo) Pty Ltd (39%), China Sino Oil Co. Ltd. (21% and Jana Corporation Sdn Bhd (4%). KOV Borneo Limited is a wholly-owned subsidiary of Kulczyk Oil.

Assets of Kulczyk Oil

Kulczyk Oil is an international upstream oil and gas exploration company with a diversified portfolio of projects in Brunei, Syria and Ukraine and with a risk profile ranging from exploration in Brunei and Syria to production and development in Ukraine.

In Brunei, KOV owns working interests in two production sharing agreements which gives the Company the right to explore for and produce oil and natural gas from Block L and Block M. KOV owns a 40% working interest in Block L,a 2,220 square kilometre (550,000 acre) area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 3,011 square kilometre (744,000 acre) area onshore in southern Brunei.

In Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The assets of KUB-Gas consist of 100% interests in five licenses near to the City of Lugansk in the northeast part of Ukraine.

In Syria, KOV holds a participating interest of 100% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon fulfillment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre (2.48 million acre) area in northwest Syria. The Company has agreements to assign an aggregate of 55% in ownership interests to third parties which are subject to the approval of Syrian authorities, and which, if approved, would leave the Company with a remaining effective interest of 45% in Syria Block 9.

The main shareholder of the Company, Kulczyk Investments S.A., increased its holdings in the Company through participation in the initial public offering of the Company on the Warsaw Stock Exchange in May 2010 and the conversion of a debenture and owns almost 50% of the issued common shares. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.

Translation: This news release has been translated into Polish from the English original.

Forward-looking Statements This release may contain forward-looking statements made as of the date of this announcement with respect to future activities on Brunei Block M and general exploration activities in Brunei and other statements that are not historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors that could impair or prevent the Company from completing the expected activities on its projects include that the Company's projects experience technical and mechanical problems, there are changes in product prices, failure to obtain regulatory approvals, the state of the national or international monetary, oil and gas, financial , political and economic markets in the jurisdictions where the Company operates and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties and actual results may vary materially from those expressed in the forward-looking statement. The Company undertakes no obligation to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement, unless required by law.